Transtasman codeshare set to fly

Plans for a transtasman air alliance between Air New Zealand and the Virgin Blue got the final tick of approval it needed in this country today.

Transport Minister Stephen Joyce this afternoon formally approved a proposal for the two airlines work together on the services and fares they offer on transtasman route.

It follows approval from the Australian Competition and Consumer Commssion last week – regarded as the trickiest obstacle to the deal.

Mr Fyfe last week told NBR if the alliance got the go-ahead, it would take around six months for the airlines to integrate their IT systems and codeshare flights would begin mid-2011.

Today he said the airlines could now get on with those plans.

“Air New Zealand and Virgin Blue will now form a team to ensure we move ahead quickly with bringing the alliance to life over the coming months," he said.

"We look forward to being able to connect our customers between all Australian cities served by Virgin Blue and all towns and cities where we operate in New Zealand.”

Air New Zealand and Virgin Blue, which operated as Pacific Blue in
Australasia, had agreed minimum seat numbers that they would operate across the Tasman, while increasing capacity on some routes.

Travellers were expected to benefit from a wider range of travel options and improved range of departure times and competitive fares.

Mr Joyce said the alliance authorisation period of three years would place a strong incentive on the two airlines to operate in a competitive manner.

"How Air New Zealand and Virgin Blue implement the alliance, as well as the state of the market, will be taken into account in deciding whether further authorisation is given."

Both airlines would report on compliance provisions twice a year to the Ministry of Transport, which has the ability to revoke authorisation should the airlines fail to comply with terms of the agreement.

Air New Zealand shares rose 3c to $1.52 today, a 52-week high for the stock.

 The alliance will have the following key components:
• A broad free-sale code share arrangement covering all Tasman sectors currently operated by either airline and domestic sectors forming part of a connecting Tasman journey;

• A revenue allocation agreement supported by a joint trans-Tasman Network Planning and Revenue Management team; and

• Reciprocal frequent flyer and lounge access agreements.